Gazprom Neft completes all financial obligations under NIS purchase-sale agreement
MOSCOW. April 25 (Interfax) - Gazprom Neft carried out its last investment tranche in April as part of the obligations laid out in the purchase-sale agreement for a controlling stake in Serbia's NIS, the Russian company said on its website.
However, the completion of payments does not mean that the modernization process at the oil refinery in Pancevo is finished; NIS is putting together a strategy for further developing the refinery and its production facilities, the information said.
Gazprom Neft shelled out 400 million euro for 51% of NIS at the beginning of 2009. In compliance with the purchase-sale agreement between Gazprom Neft and the Serbian government, the Russian company initiated a public shares buyback. During the offer, Gazprom Neft paid 40.3 million euro for 5.15% of minority shareholders' NIS shares, thereby boosting its stake to 56.15%.
The agreement stipulated that Gazprom Neft would invest 500 million euro from the beginning of 2009 to the middle of 2012 in a program to modernize and reconstruct NIS' refining complex. Gazprom Neft has also fulfilled this obligation, the statement said.
The key to NIS' modernization lies in constructing a light hydrocracking and hydrotreatment complex at the oil refinery in Pancevo, which will enhance refining depth to 84% and raise light petroleum yield to 76%. In this case, refining at the plant will reach a technological maximum of 4.8 million tonnes per year, thereby fully providing for Serbia's internal needs and allowing for petroleum product exports to Balkan countries.
Modernization of the refining complex also involves constructing a hydrogen unit, a sulfuric acid regeneration unit and a park for storing liquefied gases at the production site in Pancevo. The refinery's infrastructure facilities will also need to be reconstructed or built, and the fluid catalytic cracking unit and commercial dock will need to be rebuilt.
NIS is one of the leading vertically integrated oil companies in Central Europe. Total output comes to around 1 million tonnes a year, and the company owns oil refineries in the cities of Pancevo and Novi-Sad, with total output at 7.3 million tonnes a year. NIS also has its own chain of filling stations.